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June 16, 2022

The problem with problems - A typical innovation killer

Most entrepreneurs already understand that a solution gets successful on the market only if it targets a real, painful problem. "A painkiller, rather than a vitamin."

If there is pain, you will buy a painkiller, won’t you?

Well, not always.

This approach is an oversimplification of what actually drives acceptance of a solution. Despite having problems that are well-known and known to be painful, human irrationalities also influence which problems are solved in the end.

Just think about climate change.

Or energy efficiency until quite recently. 

Or, of course, many-many startup ideas targeting some niches, with full commercial rationale - but resulting in no significant traction.

Some problems are not painful the right way. Let’s see when and why people tend NOT to look for a new solution to the old problem.

Three bad problem types

1. Old and hurts: a good-enough alternative is already developed.

One of our clients (Combit from Hungary) developed a software that’s able to make radio frequency monitoring much more convenient, by making a rather big step compared to other technologies on the market. Coming from a telecommunications background, it was immediately understood that the theoretical ideal market for such a solution is Mobile Network Operators, as they have a very direct financial interest in sustaining their network quality by constant monitoring. During client discussions, it turned out that this is indeed a huge problem and focus for them. But here comes the trick: for mobile operators, this challenge was perceived so painful that they developed an alternative, not obvious solutions. E.g., Helping the network measurement via the customers' devices.

A similar situation we often saw at manufacturing sites. Local budgets are small, so innovative engineering colleagues develop in little increments, whatever in a quarter is possible. And actually, small steps indeed help reach a good enough status, decreasing the competitive edge of a really innovative solution.

These are tricky situations. All the experts will confirm to you that the problem you speak about exists and is important. They might also like the close-to-perfect solution you show. Still, fewer transactions will happen than you expect. 

2. The problem is huge… so we do not want to face it.

This human irrationality can probably be best illustrated with personal relationships. It is often claimed that in human contacts (or particularly: in marriage), there are some unsolvable differences (/problems). Still, the marriage or relationship can be stable and sound in the long term - participants simply stop paying attention to the problem, e.g., avoiding the topic or focusing on something within control.

It is often better (or feels better) to cope somehow than to experience the conflict and pain time and time again.

Or think about poverty. People with higher wealth often think poorer regions just do not do the right things to break out of their situation. However, poverty has been people's everyday life and environment for generations… they cope with it and have a completely different mindset about motivation and acceptable solutions. Some of these people do not think of them as poor at all. Their perception of the same situation is different and definitely not a primary concern if chatted spontaneously.

Companies show the exact same behavior in case of persistent problems. We are always extra cautious with our clients when they address a real worldwide problem that has been present for years.

For example, the worldwide shortage of software developers has been influencing the operations of many industries for years already (at least since the early 2010s, as I reckon). As an enterprise stakeholder, you can not wake up every day with this problem in mind. You must cope with it somehow, whether there is a solution available or not.

In our experience, many areas, like energy efficiency or even quality control can reflect similar behavior: as a stakeholder, you just cope with these challenges, trying to figure out a gradual, year-by-year improvement track. And hope it will be enough in the long term or some innovation accelerates the efforts. Also if everyone has this problem and it is the status quo, there is no honest and deep expectation to improve this situation at all.

3. No solution seen = no organizational support.

Efficient top managers try to avoid risks and focus on actions that improve their results with high probability. 

Whenever a year’s business goals are set, well, they should at least seem achievable. Within the year, you are typically measured on milestones reached and how you delivered a promise.

Would you commit significant resources to a problem you have no idea at the time of planning if it can be solved or not? Can you justify at the end of the year if the problem remains unsolved because there was indeed no solution - and efforts took resources from something more certain?

So organizations tend to plan on the foundation of more certain initiatives.

That means there is simply no responsible decision-maker or budget dedicated to what you can solve with real groundbreaking innovation. No target outcomes set, no KPIs associated with the problem, so apart from personal enthusiasm, no one is really motivated to engage.

For example, we have seen this situation with energy-related inventions in almost any industry (that is changing now with new regulations, budgets, and hopefully decision-makers all quickly emerging). Similarly, some automations and softwares do not find their immediate place in the organization - business? IT? higher level? Who can evaluate and who has the budget? The same reason - no one had an idea a viable innovation would knock on the doors.

What to do about these problems? Your road to success

1. Know what type of problem you have

The best way to uncover the priority of the problem you are trying to solve is to execute so-called customer discovery or customer development interviews

Listen, listen and listen carefully about what’s being said and what’s not. Ask questions that uncover the context rather than the problem. Interviewing is a very disciplined art. With the right amount of empathy and lots of practice, you can master it. Our experience shows that any dead-end can be discovered after five interviews as the chances of talking to only five people who don’t have that problem are slim.

Our colleagues have conducted interviews in the range of 1000+, so be patient with yourself. All you need is curiosity and empathy. It can be learned by doing, but there is no shortcut to success. Resources for you to start learning the interviewing process:

Once you figure out which of the above three apply to your situation, comes step 2.

2. Know your limits and possibilities

Too often, startups and SMBs confuse their options with the giant players of their chosen industry. Microsoft or Google, or all the big ones, have time and budget to evangelize the market; SMBs and startups don’t. Any incumbent player can lobby for new regulations or to avoid introducing new regulations, or make themselves exempt. If you know your possibilities, you might be able to create a strategy leading to success.

3. Strategies to Go-To-Market

If you are in situation 1 (a good enough alternative), you might want to pivot into a segment where the problem is not yet solved. (E.g., in our TelCo case, Authorities do not have access to the mobile devices for network quality checks)

Another solution can be to focus on a smaller subset of the problem—engaging stakeholders for just something small yet meaningful.

For companies facing situation 2 (hurts, so I can not care), you can either: 

( a ) focus on innovators who care or 

( b ) you can try to lobby for the legal framework to put pressure on the players. 

( c ) As another option, you can create a movement that generates pressure on companies, not through legislators but the broader community. 

All that depends on the service you are trying to sell. 

For environmentally important innovations ( a ) will be your best friend as a startup and ( b ) or ( c ) if you are a large enterprise.

Keep in mind that innovators usually represent only 1.6% percent of the market, so it will be a diligent hustle to find them.

In the case of situation number 3 (no organizational support), go upwards in the organization, where the impact on budgets is higher (either for current or next year). 

If you have the runway, another option is to allocate more resources to education and presales - building a long-term sales channel, and expecting new clients with new (annual) budgets. More often than not, you will be unable to accelerate the transactions in some instances.

If your time is short: pivot to a more urgent or trendy problem, where budgets are immediately available.

Key take-aways

  • Some problems are problematic: human irrationalities also influence whether decision-makers intend to solve a seemingly burning problem.
  • There is no better way than to do customer discovery interviews: listen, listen, listen.
  • Depending on the context, pivoting or narrowing the solution’s scope may help to generate traction.

Experience helps. If you feel your innovation is stuck: contact our AbilityMatrix team. We live & breathe problematic problems, actively looking for challenging situations to keep more innovations alive. :)